G8 tipped to generate £40m for economy

Businesses in Northern Ireland are overwhelmingly supportive of the forthcoming G8 Summit, which is expected to bring £40m of net benefits to the region in the immediate future.

According to a new report from Barclays, most businesses also believe there is longer-term potential to use the gathering of world leaders on June 17 and 18 to grow the economy by boosting tourism, exports and foreign direct investment.

The research, carried out by the University of Ulster’s Northern Ireland Centre for Economic Policy on behalf of Barclays, showed that 84 per cent of businesses believe the event, which will be held in County Fermanagh, will be a good thing. Across all sectors and geographically across Northern Ireland, two thirds of businesses expect the G8 Summit to have a positive or very positive effect on the economy.

The survey results were based on a total of 213 telephone interviews with businesses in Northern Ireland.

Adrian Doran, Head of Corporate Banking, Barclays Northern Ireland (pictured), said: “The results of our research can be seen as a ringing endorsement from the Northern Ireland business community towards hosting the G8 event in Lough Erne. It is rightly seen as a fantastic opportunity to showcase Northern Ireland in a positive light to a global audience, as well as having immediate and longer-term benefits for the local economy.”

Secretary of State for Northern Ireland, Rt. Hon Theresa Villiers backed the findings, saying: “This important report demonstrates that the Prime Minister’s decision to host the G8 Summit in Fermanagh will provide a major economic boost to Northern Ireland. It shows that the benefits of Northern Ireland hosting the Summit will be realised both in the short term and through a positive longer-term legacy, by helping increase inward investment.”

Businesses in the hospitality and tourism sector are the most positive about the Summit(73 per cent), though support was strong across all sectors with 69 per cent of professional services supportive and 58 per cent of manufacturers.

It is anticipated that demand for a total of 35,000 to 45,000 nights of accommodation could be generated in Northern Ireland as a result of the trips from the delegates, their entourages, security, international media and associated officials. This could feasibly generate £5.5m to £7.5m for the tourist industry, predominantly in Co. Fermanagh, said Barclays.

Substantial global media coverage of the event could potentially generate the equivalent of £70m of advertising space in the immediate term, and over £500m in the longer term, which by any standards is a huge publicity boost for Northern Ireland, the report said.

A third of local businesses agreed that delegates from the world’s eight wealthiest nations will come away with a view that Northern Ireland is a changed society, capable of attracting global business. A further 20 per cent believe that it will highlight Northern Ireland’s untapped potential.

Showcasing Northern Ireland to a global audience is the main benefit that businesses expect from the G8 summit (40 per cent). A third of the businesses surveyed also expect long-term economic benefits. Though it is difficult to quantify long-term benefits, to put this in context, a 1 per cent rise in long-term tourist expenditure, export sales or FDI investment would be worth £180m to the region over three years

Almost three quarters of businesses stated that they believe the Republic of Ireland, which currently holds the Presidency of the Council of European Union, will also share in the economic benefits. With a number of delegations choosing to stay in the Republic of Ireland this will be a welcome boost to the west of the island.

The G8 Summit would appear to be coming at an opportune time, given that 73 per cent of businesses surveyed believe the Northern Ireland economy is either weak or very weak. Businesses added their voice to the growing clamour for more investment stimulus, rather than austerity measures, with 44 per cent of businesses feeling that the Government should invest more and run a larger deficit. Interestingly, the research suggested that, on balance, businesses would prefer the Government to borrow more to fund investment, rather than cut expenditure, or increase taxation at this time.

Corporation tax reduction is cited as the most important policy area in which the Northern Ireland Executive should be investing to secure our economic future, with 60 per cent of respondents stating that it should be one of its top three priorities. While a reduction in corporation tax is the business community’s top priority, there are a number of other policy areas that they feel are almost as important, including investment in infrastructure, skills, exports and grant support to encourage new FDI.

Adrian Doran added: “With the vast majority of businesses believing the economy to be weak, our research indicates strong support for hosting the G8 Summit in the Lough Erne Resort and that the event will provide significant economic opportunities for Northern Ireland, especially in the longer term.

“Businesses would like to see more investment in Northern Ireland, rather than additional austerity measures, and a reduction in corporation tax is seen as the most important policy tool that the Northern Ireland Executive could deploy.

“Despite the recent delay in a final decision on corporation tax,Northern Ireland must continue to lobby for this important policy change. However, in addition we should also consider alternative ways to stimulate the economy, such as investing in infrastructure and skills to increase the economic capacity of the region. This will build a solid foundation for long-term economic growth and will ensure that Northern Ireland is ready to fully realise the benefits of corporation tax if the powers are eventually devolved”.